35) Refer to the above information. Assuming Ski's FCU is the functional currency, what is the net translation adjustment that result from translating Ski's trial balance into U.S. dollars at December 31, 20X8?

A) $396,500 debit

B) $285,000 credit

C) $405,000 credit

D) $411,000 credit

Answer: C

36) Refer to the above information. Assuming Ski's FCU is the functional currency, what is the amount of patent amortization for 20X8 that results from Polaris's acquisition of Ski's stock on January 2, 20X8. Round your answer to the nearest dollar.

A) $11,500

B) $11,884

C) $7,667

D) $9,394

Answer: B

37) Refer to the above information. Assuming Ski's FCU is the functional currency, what is the amount of translation adjustment that appears on Polaris's consolidated financial statements at December 31, 20X8?

A) $419,184 credit

B) $416,884 credit

C) $405,884 debit

D) $398,500 credit

Answer: A

Please explain how to get these numbers.

On January 2, 20X8, Polaris Company acquired a 100% interest in the capital stock of Ski Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10- year remaining life. At the date of acquisition, Ski's balance sheet contained the following information: Cash Receivables (net) Inventories (FIFO) Plant and Equipment (net) Total Accounts Payable Capital Stock Retained Earnings Total Foreign Currency Units (FCU) 40,000 150,000 500,000 1,500,000 2,190,000 200,000 600,000 1,390,000 2,190,000 Ski's income statement for 20X8 is as follows: Revenues from Sales Cost of Goods Sold Gross Margin Operating Expenses (exclusive of depreciation) Depreciation Expense Income Taxes Net Income Foreign Currency Units (FCU) 1,010,000 (590,000) 420,000 (120,000) (200,000) (40,000) 60,000 The balance sheet of Ski at December 31, 20X8, is as follows: Cash Receivables (net) Inventories (FIFO) Plant and Equipment (net) Total Accounts Payable Capital Stock Retained Earnings Total Foreign Currency Units (FCU) 180,000 210,000 520,000 1,300,000 2,210,000 180,000 600,000 1,430,000 2.210,000 Ski declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow: $ January 2 October 1 December 31 Weighted Average 1 FCU 1 FCU 1 FCU 1 FCU $ $ $ 1.50 1.60 1.70 1.55 $ $ Assume Ski's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8. On January 2, 20X8, Polaris Company acquired a 100% interest in the capital stock of Ski Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10- year remaining life. At the date of acquisition, Ski's balance sheet contained the following information: Cash Receivables (net) Inventories (FIFO) Plant and Equipment (net) Total Accounts Payable Capital Stock Retained Earnings Total Foreign Currency Units (FCU) 40,000 150,000 500,000 1,500,000 2,190,000 200,000 600,000 1,390,000 2,190,000 Ski's income statement for 20X8 is as follows: Revenues from Sales Cost of Goods Sold Gross Margin Operating Expenses (exclusive of depreciation) Depreciation Expense Income Taxes Net Income Foreign Currency Units (FCU) 1,010,000 (590,000) 420,000 (120,000) (200,000) (40,000) 60,000 The balance sheet of Ski at December 31, 20X8, is as follows: Cash Receivables (net) Inventories (FIFO) Plant and Equipment (net) Total Accounts Payable Capital Stock Retained Earnings Total Foreign Currency Units (FCU) 180,000 210,000 520,000 1,300,000 2,210,000 180,000 600,000 1,430,000 2.210,000 Ski declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow: $ January 2 October 1 December 31 Weighted Average 1 FCU 1 FCU 1 FCU 1 FCU $ $ $ 1.50 1.60 1.70 1.55 $ $ Assume Ski's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8